Washington — The United States and its European allies have stepped up sanctions so that Russia pay to invade Ukraineand despite the fact that the punishments affect the Russian economy, so far they have not managed to stop the fighting.
On Thursday, the White House announced a new round of financial sanctions targeting people from the circle closest to the president Vladimir Putinand the State Department issued travel bans on 19 Russian oligarchs, their families and associates.
Days ago, the White House announced new sanctions against Russia and its ally Belarus, including export controls targeting Russian oil refineries. The United States has joined Europe and Canada in barring its airspace from Russian airlines, and the Justice Department has announced a new initiative to go after Russian oligarchs.
This tightening of sanctions has had a surprisingly rapid effect.
The ruble has collapsed and inflation is on the rise, creating new anxiety among Russian consumers, and not just among the oligarchs targeted by the first measures. The withdrawal of foreign companies has forced the closure of car factories in Russia, and Boeing and Airbus have stopped supplying parts and services to Russian airlines.
The size of the Russian economy is less than a tenth that of the US economy – barely half the size of California – and economists believe it will shrink even more, a fact that is inconsistent with Russia’s position as the second power world’s largest nuclear.
These are some of the current sanctions. Combined, they are some of the harshest sanctions imposed on any nation without the need for military action.
The new sanctions target Putin ally Alisher Usmanov, one of Russia’s richest people, and Putin’s press secretary, among others. The White House said their access to the US financial system will be cut off and their US assets frozen.
Hinder the central bank of Russia
The United States, the European Union and the United Kingdom have limited the ability of Russia’s central bank to dispose of more than $600 billion in foreign exchange reserves. This has left this bank with few tools to prop up the ruble and prevent its value from collapsing.
The contraction of the ruble caused inflation to spill over. Russians stand in line to withdraw rubles from the bank and convert them to dollars, depleting the central bank’s foreign exchange reserves.
“In Ukraine, people line up to get weapons. In Russia, people line up at ATMs because they understand that they might not be able to access this money for two days,” said Oleksandra Ustinova, a member of the Ukrainian parliament, as she pressed US senators for even tougher action.
Access to SWIFT
The West has barred major Russian banks from a system of financial transfers known as SWIFT, which is used daily to transfer billions of dollars between more than 11,000 banks and other financial institutions around the world.
The United States and its allies have refrained from expelling all of Russia from SWIFT, as they considered and rejected in 2014, when Russia invaded and annexed Crimea from Ukraine. Russia has said kicking it out of SWIFT would amount to a declaration of war.
Excluding Russia from the Brussels-based SWIFT system could also hurt other economies, such as the United States and Germany, which buy oil and natural gas from Russia.
cut back to technology
The United States said last month it would limit technology exports, such as semiconductors, to Russia, and allies Europe and Japan collaborated on the move. This week, the administration of President Joe Biden announced that it would extend those export controls to Russian oil refineries and Belarus.
Among the latest measures are sanctions against 22 Russian defense organizations that make fighter jets, drones, tanks, missiles and electronic warfare systems.
Previous export controls would deprive Russia of more than half of its current high-tech supply and deal a blow to Russia’s hopes of modernizing its military, aerospace industry and space program.
Export controls could make it difficult for Russia to upgrade aviation equipment, machinery, smartphones, game consoles, televisions, tablets and other devices. However, the restrictions could see Russia simply turning to China for its needs for those devices and their components.
The export of oil and natural gas is essential to the Russian economy, but these products have largely been exempted from sanctions because Western governments are wary of measures that could harm their own consumers. Oil prices have already skyrocketed since the Russian invasion.
According to the White House, all options remain on the table, but a ban on Russian imports from the energy sector could restrict global supply and “raise prices at the pump for gasoline for Americans,” the White House spokeswoman said on Wednesday. White House, Karine Jean-Pierre. “That’s something we’re very aware of.”
Biden is clearly concerned about a rise in gasoline prices ahead of this year’s midterm elections, as he has announced the release of oil from the federal Strategic Petroleum Reserve. Gasoline prices in the United States are at their highest levels since 2014.
Senators from both major political parties have proposed banning US imports of Russian oil.
“It makes no sense for us to rely on energy from a country that is actively participating in acts of war against a freedom-seeking democracy – Ukraine – when we are blessed to have abundant energy resources right here in the United States.”said Sen. Joe Manchin, a Democrat from West Virginia and a leading advocate for fossil fuels produced in his state.
European Commission President Ursula von der Leyen said Thursday that Europe has enough gas to cope with the heating season, which is drawing to a close.
space and airlines
After hesitating for days over possible retaliation, the United States closed its airspace to Russian airlines. The move came after the European Union and Canada had already banned the entry of Russian planes.
This prohibition is mostly symbolic. Russian airline Aeroflot operated just a few flights a week to the United States, and no American passenger airlines fly to Russia, although some United Airlines flights passed through Russian airspace on their way to and from India. Freight carriers FedEx and UPS have stopped serving Russia in recent days.
Although it will take longer to sink in, the announcement that Boeing and Airbus will stop supplying spare parts and technical assistance to Russian airlines is of greater concern to Russians. Most aircraft in Russian fleets are made by one of those two companies, according to data from aviation researcher Cirium.
The Justice Department this week announced the creation of a team of federal agents and prosecutors to prosecute wealthy Russians or anyone else who aids Russia’s invasion of Ukraine or uses cryptocurrency to help Russia evade sanctions. The team, called the Kleptocapture Task Force, could seize assets belonging to oligarchs.
Even before the new team was formed in Washington, France had already seized a yacht belonging to the head of Russia’s state oil company Rosneft, and a German official said a yacht owned by another Russian billionaire will not be moved from the Hamburg shipyard in the one receiving maintenance.
And then there is Roman Abramovich, the Russian billionaire who has said he is looking to sell Chelsea, the English soccer club he has owned for 19 years, once he faces possible financial sanctions.
During a game this week, opposing fans taunted Abramovich’s players by chanting, “They’ll sell you in the morning.”